Blue Bird ends joint venture with Generate Capital, appoints new executive officer
Introduction & Market Context
WEG SA (BOVESPA:WEGE3) presented its third quarter 2025 results on October 23, showing continued revenue growth amid significant investments in global expansion. The Brazilian industrial equipment manufacturer reported a 4.2% year-over-year increase in net operating revenue, reaching R$10.3 billion for the quarter, while maintaining strong profitability metrics despite challenging global economic conditions.
The company’s performance reflects its strategic focus on diversification across product lines and geographical markets, helping to mitigate impacts from regional economic fluctuations. WEG’s stock price showed a modest positive reaction to the results, rising 0.2% following the announcement.
Quarterly Performance Highlights
WEG delivered solid financial results for Q3 2025, with net operating revenue reaching R$10.3 billion, representing a 4.2% increase compared to the same period last year. The company’s EBITDA grew by 2.3% year-over-year to R$2.3 billion, maintaining a robust EBITDA margin of 22.2%.
As shown in the following chart of key financial metrics:
However, the company’s Return on Invested Capital (ROIC) declined significantly, dropping 470 basis points from 37.1% in Q3 2024 to 32.4% in Q3 2025. This decrease can be attributed to the substantial 24.5% increase in invested capital, which outpaced the 8.6% growth in net operating profit after taxes.
The following chart illustrates the ROIC performance and its components:
Detailed Financial Analysis
WEG’s performance varied significantly across business segments. The Industrial Electro-Electronic Equipment division, which contributes 51.6% of total revenue, showed strong growth with domestic sales increasing by 13.3% and external sales by 7.1%. Meanwhile, the Energy Generation, Transmission, and Distribution (GTD) segment, representing 35.8% of revenue, experienced declines of 6.8% in domestic sales and 1.5% in external markets.
The company’s business area performance is illustrated in the following breakdown:
A detailed analysis of EBITDA components reveals how WEG maintained its profitability despite various pressures. The increase in net operating revenues contributed R$414.6 million to EBITDA growth, which was partially offset by higher cost of goods sold (excluding depreciation) of R$339.4 million and increased selling expenses of R$44.9 million.
The following waterfall chart provides a comprehensive view of EBITDA components:
WEG continues to invest heavily in its future growth, with capital expenditures (CAPEX) increasing substantially both in Brazil and internationally. In Q3 2025, investments in Brazil reached R$321.4 million, while investments outside Brazil totaled R$351.2 million. This represents a significant increase from the R$154.0 million invested in Brazil during Q3 2024.
The company’s investment trend is illustrated in the following chart:
Strategic Initiatives & Outlook
WEG’s strategic focus remains on manufacturing site expansion and vertical integration, as evidenced by its substantial capital investments. The company has also strengthened its commitment to sustainability, with climate initiatives now certified by the Science Based Targets initiative (SBTi).
A notable strategic development is the acquisition of Tupinambá Energia, which aligns with WEG’s expansion in the energy sector and e-mobility solutions. This acquisition, mentioned in both the presentation and earnings call, represents an important step in the company’s diversification strategy.
Looking ahead, WEG acknowledges that the global geopolitical and macroeconomic environment presents challenges that demand attention. However, the company remains committed to its robust capital budget to sustain growth both domestically and internationally. Management believes that WEG’s international presence and diversified product portfolio will continue to contribute positively to its growth trajectory.
During the earnings call, executives addressed concerns about tariffs in North America, which remain a significant challenge potentially affecting profitability. They also noted a slowdown in the distributed generation market that could impact future revenue streams. Despite these challenges, WEG’s management expressed confidence in the company’s ability to navigate these headwinds through its diversified business model and strategic investments.
André Luiz Rodrigues, a company executive, emphasized WEG’s commitment to its investment plan, stating, "We remain focused on our investment plan to support growth in Brazil and abroad." This sentiment reflects the company’s long-term strategic vision despite the short-term pressure on ROIC from increased capital investments.
As WEG continues to expand globally and diversify its product offerings, investors will be watching closely to see if these substantial investments translate into accelerated revenue growth and a return to higher ROIC levels in coming quarters.
Full presentation:
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